The garda, who is attached to the detective unit at Dundalk station, was shot in the head while escorting credit union money.

He was named as Adrian Donohoe, a father of three young children, who is in his early 40s.

His wife, brother and a member of his extended family are also in the force.

It is understood that the botched bank heist took place less than a half a mile from Detective Donohoe's home.

He was one of a two-garda escort due to accompany credit union officials as they were bringing takings to a bank in the town.

The money belonged to the credit union at Lordship, a townland in Jenkinstown, outside Dundalk.

As the officials were coming out of the credit union premises at Bellurgan, Jenkinstown, they were ambushed by four raiders.

Garda Donohoe, who was waiting nearby with his colleague, Det Garda Joe Ryan, got out of the patrol car and walked towards the men.

The gunmen immediately opened fire. One shot was fired and the detective was hit in the head.

Senior officers said last night that the gang had opened fire immediately and gave no warning. The garda did not have an opportunity to draw his weapon.

Garda Ryan was not injured but was severely traumatised by the incident.

Gardai immediately circulated a description of the dark coloured car used in the getaway and a huge hunt for the gunmen was launched in county Louth and surrounding counties.

Armed patrols surrounded the immediate area and extra officers were drafted into Dundalk to join the manhunt.

It was not immediately clear whether the raiders were dissident terrorists or local criminals.

Taoiseach Enda Kenny said the killing was an outrageous and appalling act of cold blooded violence.

He said: "(It) has left a family without a husband and father and the Garda Siochana without a brave and valued member.

"On behalf of the Government and of the people I would like to express my condolences to Adrian's wife and children and to all his extended family at this unbearably sad time."

Garda Commissioner Martin Callinan expressed his condolences to the dead man's family and said he intended to travel to Dundalk later this morning.

The dead man was hugely popular in Dundalk and was also well known in sporting circles in the county.

He was the first garda to be killed while on a cash escort since Det Garda Jerry McCabe was murdered by the Provisional IRA outside a post office in Adare, Co Limerick, in June 1996.

His murder, which was quickly followed by the fatal shooting of journalist Veronica Guerin, led to a major crackdown on terrorists and the introduction of tough new legislation and the setting up of the criminal assets bureau.

The raiders sped away from Jenkinstown but it was not immediately clear whether they then headed for the Border or for Dublin.

Reports circulating shortly after the shooting that two men had been arrested in the Port Tunnel on the northside of Dublin in connection with the murder were later denied by gardai.

A special operation to track down the killers was under way last night, under the command of senior officers at Garda headquarters and in Co Louth.

Colleagues of the dead man and his wife said they were deeply shocked by the shooting.

One officer said: "He didn't have a chance. He got out of the patrol car when he saw a group of men approach the officials.

"He did not know at that stage they were armed and went over to investigate. But as he drew closer, one of them produced a firearm and opened fire without any warning".

It was a late Friday night closing at the Lordship credit union and the gunmen were obviously aware of the routine of bringing the money to a bank in Dundalk around 9.30pm.

Last night Ann McCabe, widow of murdered Garda Jerry McCabe, said she wanted to pass her sympathies on to the family of the slain garda.

"It is 17 years later on and history is repeating itself. We all thought those dark days were left behind," she said.

"I have to sympathise with that family and the shock they are going through tonight."